Fashion Accessory Store Claire's Faces Trouble In Economic Downturn
New York, NY (CNS) – Claire’s fashion accessory store is facing hard times in the next year, along with numerous other companies. Yahoo! Finance released a list today based on findings and research found on Moody’s Investors Service and other resources that gave a list of 15 potential companies that face hardships or even worse, possible closures.
The privately owned store, who also owns the accessory store Icing, employs about 18,000 employees and was bought out by the Apollo Group for $3.1 billion in 2007 when buyout funds were in excess. Unfortunately for the company, cash flow was in the negative for the majority of 2008 and analysts are claiming that the store may be close to defaulting on its debt.
The prediction of a terrible retail year to come doesn’t offer any hope and may see the company close some or all of its 3,074 stores. The company reported a 6.8% decrease for the 2008 third quarter, attributable to a decline in same store sales, according to a press release on the company’s website.
Gene Kahn, the chief executive officer of the company stated in the release, “Consistent with what other retailers have reported concerning the current challenging environment, we have experienced a decline in same store sales performance from third quarter levels thus far in the fourth quarter.”
The data is based on Moody’s ratings of the firms due to short-term liquidity and long-term debt, making the company or borrower a “very high” credit risk in a nation faced by a serious credit crunch.
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